Fixing The Top Five Issues in Project Estimation

In the entry, The Top Five Issues In Project Estimation, we identified the five macro categories of estimation problems generated when I asked a group of people the question “What are the two largest issues in project estimation?” Knowing what the issues are is important, however equally important is having a set of solutions.

Requirements. Techniques that reduce the impact of unclear and changing requirements on budgeting and estimation include release plans, identifying a clear minimum viable product and changing how requirements changes are viewed when judging project success. See Requirements: The Chronic Problem with Project Estimation.

Estimate Reliability. Recognize that budgets, estimates and plans are subject to the cone of uncertainty. The cone of uncertainty is a reflection of the fact earlier in a project the less you know about the project. Predictions of the future will be more variable the less you know about the project. Budgets, estimates and plans are predictions of cost, effort, duration or size.

Project History. Collect predicted and actual project size, effort, duration and other project demographics for each project. Project history can be used both as the basis for analogous estimates and/or to train parametric estimation tools. The act of collecting the quantitative history and the qualitative story about how projects performed is a useful form of introspection that can drive change.

Labor Hours Are Not The Same As Size. Implement functional (e.g. IFPUG Function Points) or relative sizing (Story Points) as a step in the estimation process. The act of focusing on size separately allows estimators to gain greater focus on the other parts of the estimation process like team capabilities, processes, risks or changes that will affect velocity. Greater focus leads to greater understanding, which leads to a better estimate.

No One Dedicated to Estimation. Estimating is a skill that that not only requires but practice to develop consistency. While everyone should understand the concepts of estimation, consistency will be gained faster if someone is dedicated to learn and to execute the estimation process.

Solving the five macro estimation problems requires organizational change. Many of the changes required are difficult because they are less about “how” to estimate and more about what we think estimates are, which leads into a discussion of why we estimate. Organization’s budget and estimate to provide direction at a high level. At this level budgets and estimates affect planning for tax accruals and for communicating portfolio level decisions to organizational stakeholders. Investing in improving how organizations estimate will improve communication between CIOs, CFOs and business stakeholders.